Monthly Archives: April 2009

“You see, when this recession began, many families sat around their kitchen table and tried to figure out where they could cut back. So do many businesses. That is a completely responsible and understandable reaction. But if every family in America cuts back, then no one is spending any money, which means there are more layoffs, and the economy gets even worse.” – President Obama, Speech on the economy at Georgetown University, April 14, 2009, about 10 minutes in.

Is frugality bad for the economy?

That’s the question author Amy Dacyzyn poses on page 61 of The Tightwad Gazette II. Here’s what’s crazy: The book was published in 1995 and references a 1992 book by Ross Perot entitled, United We Stand, for further reading on how rethinking spending can lead to a more stable economy.

The question remains relevant because we keep getting ourselves into recessions, and counting on spending to get ourselves out and to sustain our economy. I attended a business webinar today in which speaker economic futurist Jeff Thredgold stressed that the tide has begun to turn in the economy. He and other experts are now predicting that we will move out of the current recession, which officially began in December 2007, before the end of 2009. Although this recession has lasted longer than those of 1980 and the early 1990s and unemployment may still increase to over 10%, the severity has begun to level off. The stock market shows signs that consumer confidence is starting to build again, and that’s critical to our economy; seventy percent of our national income is determined by consumer spending.

Here’s the thing that’s really hitting us with a national unemployment rate of 8.5 percent: not all of that spending is from hard-earned money. In 2008, 65% of our spending was dictated by wages and salaries, down from 80% from 1980 to 2007. That means we rely on credit for 35% of our spending. Those whose credit cards remain open during unemployment-because if a bank suspects you won’t be able to make your payments, they can cut you off at any time, or raise your interest rates, for any reason really, without notice-will likely continue to use them, but not on the vacations, appliances, clothing, and entertainment they did before.

If it lasts long enough, the forced frugality of the current recession could change American society as a whole from greedy, credit-burdened consumerists who work to get more stuff they can’t enjoy because they’re working too much to pay off the debt they borrowed to get the stuff, to a society that values the bare necessities, the earth, and interpersonal experiences. As Marian Salzman, the chief marketing officer of Porter Novelli, a public-relations company, said in a story published last month in U.S. News & World Report, “[T]here is an anti-bling thing going on.”

I heard much of the same on the radio show State of Affairs last month. People have shifted their dollars to maintenance, “do it yourself” projects, anything that will help them save money at a time when they fear they might not have a job forever, or when they know that a home equity loan is impossible on an upside down house. The savings rate has gone from -1% to 5%. People are tracking their spending, learning how to prioritize, and learning how to define what’s really important. We’re learning lessons that can bring down a capitalist economy.

Greed has employed me. I don’t understand why auto makers roll out a new version of every model of every make every year, or why most drivers get bored with their car after three years and feel the need to swap one vehicle they don’t own yet for another one they never will, but I made more money per month selling cars than I have per month at any other job. I hated wrapping overpriced presents for ungrateful, rich snobs in Seven jeans and Juicy Couture jogging suits who routinely spent over $1000 a week in a southern California Bloomingdale’s and who threw tantrums over restrictions on the 20 percent savings cards that cost them a $5 charitable donation once a year, but without their obsession over obtaining the latest styles before everyone else and at regular price, I would not have been able to eat as I nurtured my showbiz habit. I can’t tell you how many commercials I wrote as a radio copywriter advertising clothing sales, furniture with easy financing and guaranteed credit approval, or specials on custom wheels, sound systems, and rims. Those same marketers’ holding back their ad dollars led to my current state and is presently sending newspapers and other publications into bankruptcy. One of the comments in the pile Oprah’s website collected after Suze Orman’s last financial show was from an irate spa owner, appalled at Orman’s advice to cut your spending to the “bare bones,” or as the commenter saw it, put small business owners out of business.

Our country is at a crossroads right now. The greed that unregulated free enterprise bred has screwed us, but a radically new system is still too hard for people not yet suffering to imagine. I’m not even sure that the government should take charge of or be heavily involved in the overseeing of corporations, and I don’t know why I’m not sure. Perhaps because I know and admire several smart, honest women who own their own businesses and feel like they deserve to revel in their success. Perhaps because I know that money is a motivator and that it’s employed me. Perhaps because I like paying low prices more than I care about the exploitation of workers. (Of course, if I were earning enough money to only support local small businesses, I would.) Perhaps because I think our government officials are just as fallible as everyone else, and if they don’t mess up a new system with their own disagreements or errors in judgment, a person with greater ingenuity will buy them out.

The Obama Administration could be on the right track anyway. Keynesian economic theory suggests that we spent our way out of the Great Depression with federal stimulus packages that increased disposable income. History also shows us that we tend to revert back to our old ways once the tough times are over. Most of us were spending beyond our means, but at least we had some means, and once those means are restored to their previous levels-and for many industries, or people willing to learn new skills, they will be (even before the end of the year!)-most us will revert back to credit and debt. Of course, massive debt isn’t entirely the consumer’s fault; when credit card companies and banks can change your interest rates on a whim, manageable debt becomes unbearable. If corporate greed is somewhat regulated when the hard times are over this time, we might have even more confidence in our plastic cards.

Amy Dacyzyn believes that if we as a society were able to save more money, we would be a better society in three ways: 1) we would have more venture capital to start businesses; 2) we would have less federal debt and lower taxes because we wouldn’t be paying off our own bad decisions; and 3) we would be able to focus on real causes of economic problems, like the outsourcing of manufacturing jobs to foreign countries.

I’m hoping that the story from U.S. News & World Report is true and that our frugality may actually become so ingrained that we question every purchase and use more cash.I’m concerned about just how our economy will restructure itself if we’re not dependent on the sale and marketing of unnecessary stuff, but if the trend continues, or if we fall quickly into another recession after this one is over, we’ll have to find a new way. And I don’t think that’s a bad thing.

Monday was my anniversary. Six months unemployed, six months to the day. Monday, October 13, 2008; Monday April 13, 2009.

I almost glazed over it without realizing it. I didn’t notice the date at all until I wrote it out, “Monday, April 13, 2009,” in the notebook that holds my notes from various sermons and bible studies. I had been too busy rewriting an essay to be submitted for publication, chasing down another freelance assignment, trying to figure out a balance between making a profit from writing and pricing myself out of the market, and trying to craft my resume to fit the description of yet another job that doesn’t quite fit me but that will do if this goes on much longer. Thanks to a couple of freelance writing assignments and that severance pay that the state Unemployment Insurance Benefits Department determined was really wages in lieu of notice, I haven’t run out of benefit money yet, but the balance is quite low. The extension application process is probably next.

I don’t fear the process, though. My insatiable craving for information and the writing that pours forth from the information I gather occupies so much of my time that I feel busier now than I felt for most of the time that I was working. The rejection letters don’t sting as much any more. I can laugh away the sympathetic looks I get from family and friends who remember that I’m on an employment hiatus just after they complain that they dread Mondays, and I might just smile a little bit every time I hear a prayer request for God to deliver someone from the gossip, tattling, backstabbing, politicking, and concrete ceilings on the job. I’m fine with dining out maybe once a month, when all the food in the house suddenly repulses me, no matter what it is. Being alone most of the time has never bothered me very much, although I know that’s not good. I’ve managed to keep myself entertained by seeing 14 plays just since October, and I saw 13 for free. I ushered at ten of them, and my mom or a friend provided tickets to three others. Insufficient healthcare coverage still concerns me, but over all, things aren’t so bad.

I didn’t think I would be unemployed for this long. I hear that the average time for unemployment these days is eight months, but I was sure my situation would be different. I’m sure that if I went to Starbucks or Wal-Mart or Six Flags it would be, but I still can’t see going for the survival job yet. I waited so long to get a job in my field, tried so hard to convince an employer that the one consistent trend in the randomness of my resume was the adept use of my written and oral communications skills, that to risk deviating from the path for only God knows how long, putting an even larger gap in my years of direct experience, and possibly getting stuck in something else is too large of a white flag to drape across my back for the moment.

As I write this, I’m looking at the sermon notes from Monday, April 13, 2009 and trying to capture the spirit of the message, but it’s impossible. There was too much life in the sanctuary that night for pen and paper, or keyboard and monitor. I remember the preacher describing my very situation: applying for positions you just know are for you and getting turned down; having doors close; following up on leads and connections that go nowhere; getting your hopes up only to be disappointed again and again and again. I knew he was talking to me, but I didn’t emote the way the rest of the church did when the preacher said that when God moves, he will compensate you for all the suffering you’ve been through. Nor did I dance or shout when he said that God makes concluding moves–moves that that will end your situation in a way that will never allow you to return to it again. Nothing really hit me Monday night. Instead, I woke up with those words in my spirit Tuesday morning and smiled as I thought of how wonderful it would be to be compensated for this blog and to make so much money writing that I never have to return to the unemployment line again.

If you missed the discussion from April 8, 2009 on living life laid off, education, jobs in Kentucky, disillusionment, the arts, politics, the future of our country, and my ambitions and inspirations (wow, we covered a lot in an hour), click here to listen to the on-demand broadcast of “Staying Creative and Upbeat While Living Life Laid Off.” Scroll down to “on demand episodes” and hit the play button. There’s about 5 minutes of music first.

Ron Herd, aka R2C2H2, aka Tha Artivist has invited me to be a guest on his show, W.E. A.L.L. B.E. News & Radio. Tha Artivist interviews people like like John Hope Franklin and Cynthia McKinney on his show, so I feel honored that he wants me to be a guest. Tune in to http://www.blogtalkradio.com/weallbe Wednesday, April 8, 2009 at 9 pm Eastern/8 pm Central/6 pm Pacific. If you’re not near a computer then, don’t worry; the show will be archived so you can catch it on demand. Live is better – you can call in with your comments and questions at 646-652-4593. You can also follow me live on Twitter @pinkedslippedgirl @missmariamw or log on to Facebook (if we’re already friends) and write on my wall.

The last full week of March, after waiting for it for three months, the library alerted me that the copy I had requested of The Tightwad Gazette was finally available. A friend on Facebook hipped me to it after my first post. I can’t use every money-saving tidbit in the book; it was published in the nineties and has some dated information, like how to save on ink for dot matrix printers. Some of the other tips-like figuring out just how much prepackaged cereal costs verses muffins, pancakes, and other carbs made from scratch-requires too many meticulous calculations, even for someone with plenty of time on her hands. But I’ve learned how to turn the last little stub of lipstick in a tube into lip gloss and how to make yard sale clothes look like new, so the book isn’t half bad. (There’s even an article addressing whether or not frugality is bad for the economy, the same debate going through my head so forcefully it requires several posts in parts.)

Author Amy Dacyczyn admits in her introduction that her ideas take “discipline and a willingness to do things that mainstream thinkers deem too extreme.” Living like a tightwad may have been too extreme for the nineties, but now that living life laid off or on the brink of it is closer to mainstream than the good life is, the book’s subtitle – Promoting Thrift as a Viable Alternative Lifestyle-looks a little more reasonable. And the fact that I had to wait so long to get the book tells me that I’m not the only one embracing its concept.

I’m just curious-in what ways are you becoming a tightwad? Leave a comment below.

“My faith is the only real thing I have now, but faith doesn’t put bread on the table.”

The pastor of an Episcopalian parish said that Thursday on Oprah. He and his wife lost their life savings in the stock market, and at 65 years old, they’re not sure if their resources will outlast their lives.

The more righteous among us might ask, “What kind of faith is that?” I think it’s a realistic one, and it’s a perspective I share. I thought about my level of faith, or maybe the reality of God’s provision, just hours before seeing the show, as I prayed for forgiveness for taking God’s provision for granted, realizing that I go through many days without even a quick blessing over my food, much less a genuine prayer of thanks for shelter, safety, health, transportation, or even the portion of the stimulus money I guiltily spent on new workout clothes at Target last week. (While I haven’t quite felt guilty enough to return them-they do fit better than the pants that have gotten so loose no amount of drawstring tightening will keep my underwear from exposure-I’ve been too ashamed to leak my purchase to the blogosphere until now.)

As I made my petition Thursday morning, I felt an entitlement farmer plant a seed in my brain. “What am I asking forgiveness for?” I thought. “He’s God, and I’m his child. He has to provide …” But before the thought was complete, I recognized its fallacy, and that moment of clarity wasn’t just the Holy Spirit convicting me for the attitude of entitlement that had momentarily replaced my appreciation of grace.

I have a bookmark-a physical one that you use to mark your place in physical books-that directs me to certain scriptures for certain situations. I guess it’s a biblical GPS for life and emotional breakdowns. When worried, the bookmark says I should read Matthew 6:19-34. Loosely summarized, verses 19 through 24 warn that focusing on temporary, material things leads to spiritual blindness, as it’s impossible to devote yourself to both God and money. In verses 20 through 34, Jesus says not to worry about your life and body when it comes to food and clothes; there’s more to your life and your body than that. Besides, he continues, God feeds the birds, and flowers are clothed more royally than King Solomon, the wisest, richest king of his time. Come on, now. Don’t you think God cares more about you than some flowers?

That scripture would have watered my entitlement seed if Matthew 25:31-46 hadn’t dug it back up. In this scripture, Jesus talks about the day of final judgment. He’ll separate the sheep from the goats, congratulating the sheep for feeding the hungry, clothing the naked, looking after the sick, and doing other charitable acts, and condemning the goats for not doing any of it.

What does all this have to do with living life laid off? Simply this: one scripture says don’t worry about food and clothes while the other rewards the people who feed the hungry and clothe the naked. This means that there will be people-during this recession and forever-who will not be fed like the birds or clothed like the lilies, and I’m absolutely sure that some of those people believe in God just as much as I do. They may even be the shepherds of a church or parish.

I’m somewhat concerned about the people who will run to houses of worship in the midst of this economic crisis with sincere belief in a genie-god who will make a high-paying job or an unusually sympathetic banker appear. I’ve been a Christian for nearly 17 years, and although I do believe that God is able to do “immeasurably more than [I] can ask or imagine” and that everything eventually works out for the best, I don’t believe he will always spare me from the worst. This realistic faith is why I quickly reverted back to my original request: forgiveness for taking God’s provision for granted. It’s also why I added a request for help to focus on what’s necessary and for a new perspective on wealth and on what’s important in life.

Suze Orman and I were on the same train of thought today. Later in the show, the pastor on Oprah explained that his “faith in his creator and provider hasn’t wavered a bit,” but the system, the government working for him and people like him? His faith in that is crushed. Suze Orman followed his comment by begging the audience-I mean literally getting down on her knees on the Oprah show-to focus on what they have and forget about whatever jobs, riches, homes, or savings they lost. She said that we’re not judged by how much money we make, a point I will likely debate in a later post, but “by who we are in the face of adversity.”

But just to warn you, we may not be spared from the worst. At the end of the show, Suze Orman, who was right when she said years ago that we would soon be in this mess, predicted that it will be 2015 before everyone affected by the recession retrieves what was lost and each person’s hope is completely restored. That means there’s an end in sight and plenty of time to reevaluate our priorities as 12.5 million of us continue living life laid off.

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See a summary of Suze Orman’s financial advice for the unemployed and everyone else here.